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Contactless payment processors

Contactless payments don’t require a signature or inputting a PIN.

The first contactless payment was a key fob that you could use to pay for gas in 1997. Today, contactless payments come in many forms, including paying for groceries by waving your smartphone or tapping your credit card on a reader. Businesses need to keep up as consumers demand more ways to pay and safer contactless checkout methods.

What are contactless payments?

Contactless payments eliminate any physical contact between a customer’s payment method and a business’s point-of-sale system. With contactless payment, no one needs to handle cash, swipe credit cards, insert chips or touch payment keypads to process a sale. Instead, consumers can use their contactless credit or debit cards, smartphones or even smartwatches to check out.

Contactless credit cards and mobile payments use near-field communication (NFC) to connect with the checkout terminal. These devices need to be close — typically no more than a few centimeters apart — to process a secure payment. Simply hover a compatible card or payment-enabled device over the reader for a few seconds until the terminal acknowledges the transaction, often with a clarifying beep.

Why should I offer contactless payments?

As more consumers are leaning towards contactless payments, here’s how it can help your business:

  • Safer and cleaner. Without having to exchange cash or cards at checkout, contactless payments limit person-to-person interaction. 82% of respondents in a Mastercard global consumer study viewed contactless payments as the cleaner way to pay.
  • More secure. Contactless credit cards are safer than traditional magnetic-stripe cards because it generates a unique token to complete your purchase, which protects the card’s actual payment information.
  • More efficient. Contactless payments are up to 10 times quicker than other in-person payment methods, according to Mastercard, helping customers move through lines quicker. And faster transaction times lower the probability of abandoned sales.
  • More convenient. Mobile payments mean fewer shoppers fumbling for wallets. And since the credit card never leaves your customer’s hands, no more forgotten cards at the store.

Are contactless payments safe?

Contactless payments are safer than the swiping of a magnetic stripe credit card. Traditional credit cards store your personal data in the magnetic stripe, making it easier for criminals to copy. On the other hand, the contactless chip card produces a one-time code or “token” each time you pay and doesn’t transmit your name, billing address or card’s security code.

If your card is ever stolen, someone else could easily make a purchase since it doesn’t require a PIN or signature. Fortunately, many card issuers and payment processors implement a limit per transaction before you need to insert the EMV chip during checkout. For example, payment processor Square accepts contactless credit card payments up to $100 before requiring additional authentication.

Mobile payments add an extra layer of security. Contactless payments on devices require user verification by entering a PIN or biometric authentication, such as a thumbprint or facial recognition.

How do I set up contactless payments for my business?

Merchants will need an NFC-enabled payment processor to accept contactless credit cards. But you’ll also want a processing platform that takes mobile wallets, such as Apple Pay and Google Pay. Here’s how to get started:

  1. Review your existing equipment. If you have an older terminal, you’ll need to upgrade your device to accept contactless payments.
  2. Consider your point-of-sale software. Make sure your point-of-sale (POS) system can handle the new contactless coding requirements. If you need to upgrade your entire system, consider a payment platform that offers both software and hardware solutions.
  3. Let your customers know that you support contactless. Many businesses post signs at checkout showing what payments they accept. Make sure you display the contactless symbol, so consumers know they have the option.

How to set up Apple Pay for business

How to choose a contactless card reader

Consider your business needs and budget when shopping for a contactless card reader:

  • Hardware. Choose from countertop registers, portable tablet readers, and mobile payment processors.
  • POS system. Be sure your new equipment is compatible with your integrated POS platform and that the entire checkout process is PCI-compliant.
  • Monthly fee. Some contactless payment processors come with a monthly account fee.
  • Cost. Payment processors can charge a flat fee per transaction or an interchange fee, which is the wholesale rate that card-issuing banks charge to accept credit cards.
  • Contract. Certain providers lock you into contracts and may charge a fee if you cancel your subscription early.
  • CVM limit. A few payment platforms add a Card Verification Method limit on credit card purchases. For transactions over the limit, customers will be prompted for a signature or PIN.

Major contactless payment programs

Apple Pay

  • iPhone
  • iPad
  • Apple Watch
  • Credit cards
  • Debit cards
  • Apple cash
  • Loyalty cards at participating stores

Google Pay

  • Android devices
  • Various smartwatches, including Fossil and Puma
  • Credit cards
  • Debit cards
  • Loyalty cards
  • Giftcards

Samsung Pay

  • Samsung devices
  • Samsung smartwatches
  • Credit cards
  • debit cards
  • Loyalty cards
  • Giftcards

Fitbit Pay

  • Android phones
  • Android tablets
  • Fitbit smartwatches
  • Credit cards
  • Debit cards

Contactless payments and COVID-19

More consumers and businesses have expressed an interest in contactless payments because of the ongoing pandemic. People want to get in and out of stores fast — without touching as many public surfaces as possible. Since COVID-19 began, about one-third of consumers have tried contactless payments, according to RTi Research. Many shoppers view contactless payments as cleaner and safer than handling cash and intend on continuing to use it post-pandemic.

With contactless payments, the checkout process is expedited and minimizes human contact. Both employees and consumers can lessen their risk when cash and cards are not exchanged. And portable contactless readers can be set up around the store to help promote social distancing and prevent people from clustering in lines.

Compare payment processing providers

Name Product Monthly fees start at Processing fees start at Processing time High-risk merchants accepted?
Chase Merchant Services
Chase Merchant Services
2.6% + 10¢ per swiped credit card
Next day when you deposit into a Chase business checking account
Accept, process and deposit customer payments in your store, online or on-the-go.
$0.08 + interchange per transaction
Next day for qualified businesses
Businesses that process more than $10,000 monthly can save with Stax's interchange+ pricing.
2.6% + 10¢
Next day
Square is a one-stop shop with both e-commerce and in-person solutions.
1.92% + $0.08 per transaction
Two business days
Conveniently packaged into three service tiers for in-person and online sales.
Payline Data
Payline Data
0.2% + interchange + $0.10 per transaction
Next day
Accepts high-risk merchants and offers discounted rates for nonprofits.

Compare up to 4 providers

Bottom line

Contactless payment is probably going to stick around. Choosing the right contactless processor can help your business keep up with consumers’ preferred method of payment. Explore a few different payment processors to find one that fits your needs.

Frequently asked questions

How do you accept contactless payments offline?

It depends on your payment processor and your credit card. For example, although Mastercard’s cards with EMV mode can authorize transactions offline, Square, a payment processor, requires an Internet connection to use contactless payments.

How do I know if I can accept contactless payments?

If your terminal has a wave-like symbol, similar to the Wifi symbol, you can accept contactless payments.

How are contactless payments different from EMV chips?

EMV chips are physically inserted into a payment terminal, while contactless payments use near-field communication (NFC) and don’t require touching the reader.

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